The petitioner for a number of years had been paying the annual deficit of the St. Francis Industrial School for Orphans. In 1933 she entered into and performed a contract with the orphanage whereby she agreed to pay the maintenance expense of sixty-four named orphans. Petitioner claimed she was entitled to a $400 credit on her income tax return for each of these orphans. Under the Revenue Act of 1932 the credit was allowed for each person dependent upon and receiving his chief support from the taxpayer. Petitioner appealed the decision of the United States Board of Tax Appeals, which denied the. credit. Held, the board of tax appeals' determination should be affirmed; while the arrangement superficially complied with the statute yet the orphans should not be deemed dependents. The beneficiary must be dependent on the taxpayer in a material degree for support, and the obligation on the part of the taxpayer to furnish it must rest on some moral or legal or equitable grounds and not on pure voluntary or charitable impulse. Morrell v. Commissioner, (C. C. A. 3d, 1939) 107 F. (2d) 34.

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